Integrative vs. Distributive
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Integrative Bargaining Versus Distributive Bargaining
In Labor Union and Management Negotiations
Tanya Burnside, Janie Magras & William Thomas
Abstract
Integrative and Distributive bargaining are terms used to describe negotiation strategies in
collective bargaining. Distributive bargaining is based on fixed or opposing viewpoints and
usually results in compromise or no decision at all. Integrative bargaining, on the other hand,
usually results in a win-win situation for both parties. In reviewing the 2003 survey by the
Quebec Ministry of Labor, the 1997 Teamsters Union versus UPS negotiations, and the coalition
of Kaiser Unions versus Kaiser Permanente, we will compare the effects of integrative and
distributive bargaining on their respective contracts. We will also present information on
management and union negotiator preferences.
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We studied the effects of integrative bargaining and distributive bargaining from both the
labor union and management perspectives. Distributive bargaining is the traditional form of
bargaining that has been used since the emergence of collective bargaining. In distributive
bargaining, parties are focused on what they want out of the agreement, having little concern for
the impact on the other party.
Integrative bargaining is focused on the interest of all parties involved. According to
Boniface and Rashmi (2012) this is a relatively new concept that surfaced in the early 1990s. In
integrative bargaining both parties negotiate in good faith, understanding that each side should
gain from the negotiations. This approach is beneficial to both sides and serves to bridge the gap
between management and labor after the negotiations are over.
Review: General studies on mutual gains: Integrative vs. Distributive Bargaining.
Paquet et al. (2000) compared 38 signed contracts. Half of the contracts were negotiated
using distributive bargaining techniques. The remaining nineteen were negotiated using
integrative bargaining. Paquet et al. measured the frequency of change in areas of pay,
recognition, work hours and several other categories. In contracts where integrative bargaining
was used, there were mutual gains in the areas of grievance and disciplinary. There were no
mutual gains in the contracts negotiated using distributive bargaining.
In 2003, Quebec’s Ministry of Labor surveyed 45 negotiators, 25 management
representatives and 20 labor union representatives, which had used integrative bargaining. The
45 people surveyed were involved in negotiating 32 collective bargaining agreements in 2003.
The report concluded that of the 45 people surveyed, 42 felt that integrative bargaining resulted
in long-term sustainable gains for both the union and management (Worklife Report, 2003).
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Quebec’s Ministry of Labor also determined representatives from each side found it
easier to negotiate on specific items of importance using interactive bargaining. Union
representatives, found it easier to negotiate on personnel change issues. Management
representatives, found it easier to negotiate work hours and overtime issues. The report found
that organizational change, an issue important to both sides, was easier to negotiate as well.
Review: 1997 Teamsters Strike against UPS.
In 1997, the Teamsters Union Strike against United Parcel Service (UPS) proved to be
crippling for the nation. After a nine month negotiation and a three day extension the teamsters
went on strike. The strike, which lasted fifteen days, impacted more than just UPS. It also
affected the cash flow of many of the businesses they serviced.
The purpose of the article written by Reiskin (2007) was to explain how integrative
bargaining is used to successfully reach agreements when two parties have shared interests. On
the other hand, greater conflicts require distributive bargaining to reach agreements. When there
are stronger conflicts within the organization, integrative bargaining is not a conducive approach.
Integrative bargaining requires a trust factor between parties.
Teamsters President James Hoffa said the union had “negotiated an agreement that will
greatly benefit our members at UPS, as well as Teamster members in other industries covered by
pension and health and welfare funds that will receive the contribution increases” (Reiskin,
2007). UPS considered abandoning the well-established, but nearly depleted, Central States
Pension fund. Issues covered in negotiations included UPS replenishing the pension fund to
allow employees long term benefits. The union refused to allow UPS to abandon the pension
plan and insisted the company work to fund the depleting pension plan. As part of negotiations,
Integrative vs. Distributive
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UPS decided to pay $6.1 billion to Central States Pension fund and be given the right by the
union to abandon future funding of the existing pension plans.
A determining factor that helped expedite the progress of the Teamster Union strike was
the reduction in UPS credit rating by Standard and Poors (S&P). UPS also realized it did not
know how the company would pay for the buyout after being placed on “CreditWatch with
negative implications.” Previously, S&P had said UPS was one of only six industrial
corporations nationwide with an “AAA” rating, the highest given (Reiskin, 2007). UPS took a
distributive stance, during the negotiations, with a result of losing their AAA credit rating in
order to resolve the strike. Despite this it was a win-win for the company and the union. A UPS
representative went on record stating that taking on debt for the right reason is the right thing to
do (Reiskin, J. S. 2007). The representative also stated the $6.1 billion buyout ensures the safety
of the pensions for their 44,000 employees. UPS further acknowledged that if the buyout did not
happen, another cut in pension benefits would occur.
Review: 2005 contract negotiations between the Coalition of Kaiser Permanente Unions
and Kaiser Permanente.
The case study focuses on the 2005 national contract negotiations between Kaiser
Permanente (KP) comprised of Kaiser Health Plan and Permanente Medical Groups, and the
Coalition of Kaiser Permanente Unions (CKPU) comprised of 10 diverse unions representing 44
bargaining units with 86 thousand union members. The 2005 contract negotiations were deemed
successful and represent integrative bargaining and distributive bargaining. Figure 1 details the
issues and concerns both parties negotiated.
Integrative vs. Distributive
FIGURE 1.
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Key Partnership Issues and Concerns Carried into Negotiations
(McKersie, Sharpe, Kochan, Eaton, Strauss, & Morgenstern, 2008)
The process of negation in this case involved two bargaining phases. Phase I: Bargaining
Task Groups (BTG) at Work, BTG committee which included Common Issues Committee (CIC)
members had the task of submitting recommendations for the agreement to the CIC. The CIC
served to strengthen Phase II of the negotiations. Part of the BTG’s process involved training on
integrative bargaining negotiations. In seven out of the eight BTG’s integrative bargaining was
used more than distributive bargaining. Mutual and conflicting interests included performance
improvement, attendance, and benefits. Each interest was handled by a different BTG
committee. Phase II: CIC Negotiations, designated the CIC with completing contract
negotiations. This involved BTG recommendations. The labor unions gains included reduced
differentials for like positions across the board, sustained health pension benefits, and
Integrative vs. Distributive
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performance sharing, training, trusts, and monetary issues. Management gains included stable
pay for performance, revamped attendance program, established agreement with union for flex
benefits program, continued local and regional based wages, prevention of increases to the
benefit pension program, and investing more money in positions the organization needed to fill.
Negotiators effectively used distributive bargaining when conflicts between parties were
apparent and used integrative bargaining when mutual interest existed. It is important to note
that trusting relationships had already been formed between both parties as a result of the Labor
Management Partnership (LMP), allowing more mutual consideration during negotiations. As
long as a high level of trust existed distributive bargaining could be limited. As with any
organizational conflict, tensions posed a threat to solutions. Those tensions had to be effectively
handled before either negotiation process could be used. Issues causing the most tension
requiring distributive bargaining were wage and benefits. Another major issue was the potential
dissolution of the AFL-CIO, which involved several member unions that comprised the Kaiser
Coalition. The result of an AFL-CIO split would create a new federation and leave remaining
member unions with a fraction of what AFL-CIO represented. Issues like absenteeism and sick
leave policies were effectively addressed using integrative bargaining. Negotiation research
suggests that distributive bargaining stances are used by both parties during negotiations (White
et al. 1994; Kristensen and Garling 1997). The use of either bargaining stance in this case is
most clearly determined by whether the issue is integrative or distributive.
The case study authors concluded that integrative bargaining negotiations “served as a
way of applying or operationalizing integrative bargaining and affected the process dynamics in
ways the Walton and McKersie theory predicted”. The Walton and McKersie Behavioral Theory
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of Labor Negotiations suggest concepts of ‘mixed-motive nature of bargaining’ and the ‘contract
zone’. Walton and McKersie suggest that mixed motive and trust developed relationships move
negotiations past distributive bargaining. Walton and McKersie also add that poor
communication during distributive bargaining may lead to positive contract zone strikes
(Kochan, 1992).
Distributive bargaining, integrative bargaining, attitudinal structuring, and intraorganizational bargaining are the four sub processes represented in labor negotiations.
According to Walton and McKersie (1992) distributive bargaining is defined as “a zero sum or
‘win-lose’ payoff structure”, in which limited resources are distributed. Integrative bargaining is
the opposite consisting of a variable payoff or ‘win-win’ structure in which the parties have
opportunities to mutually meet each other’s needs. Attitudinal structuring seeks to change
attitudes of either party to attain maximum benefits for both parties. Intra-organizational
bargaining focuses on the activities of each party including interaction (Walton & McKersie,
1992).
Distributive bargaining in this case dominated when economic and attendance issues
were negotiated. Conflicting issues promoted emotional negativity that fostered distributive
bargaining, but forced parties to work through emotions and continue the process. Integrative
bargaining was more prevalent in the use of BTG’s who’s integrative bargaining techniques were
used by members that had already established trust, respect and the ability to communicate
effectively for negotiations. Intra-organizational bargaining reflected in deadline pressures,
conflicting positions of management and unions, and communication using integrative
Integrative vs. Distributive
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bargaining. Attitudinal structuring reflected in the trust members developed and their ability to
effectively handle emotions.
Review: Survey of Management and Labor opinions on the value of Integrative
Bargaining.
A study completed at the University of Massachusetts Center for Survey Research
(Cutcher-Gershenfeld, Kochan & Wells, 2001) used information from a National Performance
Review Customer Survey commissioned by the Federal Mediation and Conciliation Service
(FMCS) to contact union and management negotiators and question them on the value of
Integrative Bargaining. The FMCS provided data on 1050 contracts with expiration dates
between April I, 1993 and April 1, 1996. The FMCS received 777 union negotiator responses
and 780 management responses to the survey.
For the purposes of their article Cutcher-Gershenfeld, Kochan & Wells focused their
evaluation on matched pairs of lead negotiators for both union and management on each side of a
contract negotiation. A total of 586 pairs were surveyed on whether they preferred to use
integrative or distributive bargaining in contract negotiations. By selecting pairs they ensured a
true comparison between management and union perceptions on the same contract negotiation.
The 586 pairs closely match the distribution of unionized companies in the country
though there were some slight variations. Figure 2 below, shows percentage of industries
represented in the survey versus percent of unionized companies, for that industry in the national
population. While the survey sample does reflect the population of bargaining units on file with
the FMCS, manufacturing and healthcare are somewhat over-represented. Conversely retail,
wholesale and service are slightly under-represented as are all other remaining industries. The
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key limitation of the survey was noted as “a cross-sectional snapshot of collective-bargaining
practices”.
Figure 2. Comparison of Survey Sample to National Population
(Cutcher-Gershenfeld, Kochan & Wells, 2001)
The survey drew a conclusion from the negotiators that had experience with Integrative
Bargaining on whether they preferred it or the distributive bargaining method. Of the managers
surveyed, 79.8 percent preferred Integrative bargaining versus only 59.6 percent of union
leaders. The assumption was made that these percentages were the result of experiences to date.
Translating this to the overall sample of 1050 contract negotiations, the survey team concluded
that 26.2 percent of management negotiators and 24.8 of union negotiators prefer the use of
Integrative bargaining in negotiating contracts. According to this study, management negotiators
tend to see the value of Integrative Bargaining more than union negotiators. But, there are still
many strong supporters of Integrative Bargaining in the union ranks as well.
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Review: A union representative’s view of interest-based bargaining.
The article A Special Comment from a Conflict Management Practitioner: A call for
research on collaboration versus traditional bargaining in labor-management relationships
(Roose, 2006) was written by Paul Roose who worked for the California State Mediation and
Conciliation Service (CSMCS) in 2006. Roose offers some firsthand knowledge on the value of
collaborative negotiations over the traditional adversarial negotiations. His knowledge comes
from experience as a Shop Steward in the Letter Carriers Union while working for the US Postal
Service (USPS).
Roose explained how USPS supervisors were pressured by their leadership team to drive
higher productivity. When the letter carriers failed to increase their productivity the supervisors
would issue performance consultations. The write-ups would only serve to upset the letter
carriers causing them to work “to rule and not one step faster”. This caused supervisors to create
work-arounds which generated grievances from the union at the rate of approximately 1500
grievances per year from only 3000 union members.
This continuous cycle of pitting-unhappy-grievance-filing letter carriers against stressed
out USPS supervisors placed a tremendous and unnecessary financial burden on both sides. The
amount of time spent resolving grievances was very costly prompting USPS managers and the
union leaders to work together toward something they called Employee Involvement (EI). EI was
a concerted effort to change behavior in the organization on a daily basis. Union representatives
and USPS leaders would meet regularly, at all levels, to discuss and resolve problems. The new
concept being used on a daily basis helped Roose understand that if he worked with the company
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to achieve their objectives during contract negotiations, then the company would be more likely
to help him accomplish his member’s objectives.
Conclusion
Based on the studies of union and management perspectives we feel that integrative
bargaining is the best bargaining stance to use when both parties have mutual interest. We
acknowledge the need for a distributive bargaining stance when conflicting interests exist. Often
contract negotiations should, and do, include both.
In our research, we found that management negotiators preferred integrative bargaining
more often than union negotiators. However, it would be interesting to further study matched
pairs that do not agree integrative bargaining is preferable. The question for this study would be
how much does the outcome of negotiations impact negotiator opinions of usefulness of one
approach over the other.
Discussion: we agree that labor negotiations should include a mix of integrative and
distributive bargaining to reach the best possible agreement. What are your thoughts on this?
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References
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